User Account

All Pages

What is the present value of these future salary payments

Assignment Help Finance Basics
Reference no: EM132460597

The Controller of I3 Technologies Inc. is 40 years of age and his salary next year will be $150,000. He forecasts that his salary will increase at a steady 5% per year until his retirement at age 55. Answer the following questions.

  1. If the discount rate is 9%, what is the present value of these future salary payments?  
  2. If he saves 15% of his salary each year and invests these savings at an interest rate of 9%, how much money will he have saved by age 55?
  3. If he plans to spend these savings in equal monthly amounts over the next 15 years, how much can he spend each month? Assume that when he retires he transfers the money into a money market account earning 3% per year with monthly compounding. Additionally, assume that withdraws are at the end of each month and that his first withdraw is at the end of January in his 56th year.

Reference no: EM132460597

Questions Cloud

What interest are you being charged : You borrow $85,000 from a bank, the annual loan payments are $8,273.59 for 15 years. What interest are you being charged?
How much you expect to receive at the beginning : You could earn 8% on your money compounded semiannually. How much you expect to receive at the beginning of each period for the annuity?
Explain the process by which arbitrage will adjust : Using both words and equations, explain the process by which arbitrage will adjust the term structure. Under which theory of the term structure
Determine unadjusted trial balance for eco-centric designs : Determine the excess of revenues over expenses for June. 5. Can you think of any reason why the amount determined in (4) might not be the net income
What is the present value of these future salary payments : He forecasts that his salary will increase at a steady 5% per year until his retirement at age 55. Answer the following questions.
How would owning and operating a small family business : How would owning and operating a small family business, like WorldCom at a time in history with rapid development and growth, create potential temptations
What evidence to support testimony as an expert witness : What facts would you highlight and include in evidence to support your testimony as an expert witness? this is in the world com fraud case
What is the present value of growth opportunities : If Sepia goes forward with the plan, what will be its new stock price? What is the present value of growth opportunities?
Finding the current us treasury yield curve : You are an intern with First Bank, and have been asked to develop estimates for yield spreads that would be appropriate for corporate bonds

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd